You may not have much need for credit right now, but in a few years, having access to credit will be important as you make major purchases such as a car and a home. When it’s time to borrow, lenders will look at what’s known as your credit score to give them an idea of how you use credit.
Credit reporting agencies gather information about how people use credit. They provide that information to banks and other creditors in two ways: as a detailed file containing pages and pages of information, and as a three-digit score. That score simply summarizes all the information in their file. The higher the score, the better the individual’s use of credit.
If you’ve never used credit, you may have a tough time getting a credit card or a loan when you need it. That’s why it’s a good idea to take steps now to build your credit score. Fortunately, it’s not hard to do.
One of the easiest ways is to open our Share Covered MasterCard®. It’s a secured card that is backed by money you deposit. You can use the Share Covered MasterCard like any other card, up to the amount of your deposit. As you make payments on time, you’ll start to build up a positive credit history.
Another way to build your credit score is to take out an auto loan. As a member, you may qualify for one of our auto loan programs, with competitive rates that are often a better value than dealer financing. Or, consider applying for a small personal loan, putting the money in a savings account, and paying it back over several months.
No matter which approach you use, be sure to make your payments on time, and don’t take out more credit than you can afford to pay back. After several months of making payments on time and using credit responsibly, you’ll earn a great credit score that will make it easier for you to get more credit when you need it.